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From hot air to cold hard facts: how financial markets are finally - - PowerPoint PPT Presentation
From hot air to cold hard facts: how financial markets are finally - - PowerPoint PPT Presentation
Investment Association Viewpoint From hot air to cold hard facts: how financial markets are finally getting a grip on how to price climate risk and return and what needs to happen next 16 October 2020 Andrew Hauser, Executive Director for
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Potential economic benefits of disclosing climate metrics (and costs of not)
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TCFD-aligned disclosures
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Correlations between environmental scores from different rating providers
P1 P2 0.25 P3 n/a n/a P4 0.28 0.47 n/a P5 n/a n/a n/a n/a P1 P2 P3 P4 P5
Greenhouse Gas Emissions
P1 P2 0.40 P3 0.22 0.19 P4 0.26 0.33 0.02 P5 0.37 0.05 0.17 0.36 P1 P2 P3 P4 P5
Energy
P1 P2 n/a P3 0.22 n/a P4 0.19 n/a 0.18 P5 0.55 n/a 0.34 0.34 P1 P2 P3 P4 P5
Green Buildings
Key Each matrix displays correlation coefficients between Environmental ratings given by five rating providers (labelled P1 – P5 in the charts)
- n a sample of 924 firms (2017 data).
Right: Correlation coefficients between aggregate Environmental ratings. Below: Correlation coefficients between ratings
- f a selection of more granular environmental
categories.
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Estimate of APF corporate holdings ‘portfolio warming potential’ Alternative warming potential metrics for same portfolio
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A selection of ‘green bond’ structures
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Total green bond issuance Corporate green bonds outstanding by nationality of issuer
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Currency composition of bonds by UK domiciled issuers (excluding gilts) New issue premia for non-financial European-issued € bonds (Sep 2020)
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Sovereign green bonds in issue Dutch green corporate bonds
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Number of launches of new ‘climate aware’ funds AUM and flows into sustainability-rated
- pen ended funds
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ESG integration
Source: CFA Institute
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